CORN (March)
Yesterdays Close: March corn closed 6 cents lower, trading in an 8-cent range on the session. Funds were estimated sellers of 9,000 contracts on the day.
Fundamentals: Yesterday morning’s export inspections came in at 586,000 metric tons, this was below the expected range from 700,000-1,000,000 metric tons and short of last week’s 639,000 metric tons. The corn bulls really need some help from exports if they want to get a sustainable rally in the near future. Also on the radar is weather in South America. Talks of La Nina like conditions have some market participants concerned about less than expected corn yields. We do have a WASDE report out next Tuesday (December 12th), we hope to have a convenience table for you before the end of the weekend.
Technicals: The 50-day moving average held once again yesterday, a barrier we have been hitting on hard recently as significant resistance. The market started Sunday night firm, but we like to see how the floor opens as volume confirms price. The inability to gain momentum with volume from the floor open invited shorts to come back into the market and could lead to continued pressure in the first half of the week. On the support side of things, our first pocket comes in from 348 ¾-350, this represents recent lows and they physiological significant 350 number. A break and close below could lead to an extended move lower.
Bias: Bearish
Resistance: 358-360 ¼****, 369 ¼-370 ½***, 375****
Support: 348 ¾-350**, 334-335 ½***, 323-325 ¼**
SOYBEANS (January)
Yesterdays Close: January soybean futures closed 4 ½ cents higher, trading in a range of 11 ¾ cents on the day. Funds were estimated buyers of 6,000 contracts on the session.
Fundamentals: Yesterday morning export sales came in at 1,800,000 metric tons, this was above the top end of expectations from 1,200,000-1,500,000 metric tons; this was also above last week’s read of 1,723,000 metric tons. Weather concerns in South America are starting to cause a little concern as talks of La Nina continue to gain traction with developing weather models. Argentina is still planting, they are estimated to be 48% planted, this is 2% behind last year’s pace. Decent soybean meal has also helped offer some support recently. We do have a WASDE report out next Tuesday (December 12th), we hope to have a convenience table for you before the end of the weekend.
Technicals: On the technical side of things, the market has formed an island, which means the Sunday night gap higher was not filled. This gap will be first support this morning, that comes in at 995 ¾. If the market sees pressure below here, we could see a retest of our support pocket from 981 ½-986, this represents the 50 and 100 day moving average. The more significant indicator is the 50% retracement from the June lows to July highs (also the range of the year) at 984 ¾. We continue to have a bullish tilt on the market, the bulls want to see a close above 1004 ¾.
Bias: Neutral/bullish
Resistance: 999-1004 ¾***, 1014**, 1021 ½****
Support:995 ¾**, 981 ½-986 ¼***, 968 ¼****
WHEAT (March)
Yesterdays Close: Wheat futures closed 5 cents lower yesterday after trading in a range of 8 ¾ cents on the day. Funds were estimated sellers of 3,000 contracts on the session.
Fundamentals: Yesterday morning’s export inspections came in at 410,000 metric tons; this was within expectations from 250,000-450,000 metric tons and was also above last week’s 348,000 metric tons. Although this was within expectations, it is nothing to get excited about. The market will want to consistently better than expected exports to help offer support. There were some concerns of rain in Australia over the weekend which helped provide a spark Sunday night, that move was sold into on the floor open which is why we often wait for volume to confirm price before getting too excited. Australia is estimated to be 50% done with harvest.
Technicals: The market started out with a bang Sunday night and Monday morning, but funds took advantage of the light volume/higher trade move when the floor opened. We continue to hold a bearish bias on the market until we see a clear shift in fundamentals that could encourage a short covering rally. Technical resistance comes in from 445-449 ¾, this represents the recent highs as well as the 50-day moving average. The 50-day moving average is a very simple indicator, but it is one we have not closed above since July. Consecutive closes above resistance could encourage short covering from the funds. Until then, the bears remain in control and we are expecting to see a retest of the contract lows at 424 ¼.
Bias: Bearish
Resistance: 445-449 ¾ ****, 452 ¾**, 468 ¾***
Support: 433 ¾**, 422 ½-424 ¼***, 412 ¾**, 399-402 ¾****
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